The buzz on good business tactics to create a successful f&b venture
By Francine Cohen and Chase LeBlanc
New year, and with it come new thoughts about a brighter future that may include you going off on your own exciting new venture. Or refreshing an existing f&b outlet. Good for you!
However…before you embark on this adventure you might want to give this just a little more thought and consider some things perhaps you hadn’t yet considered. We want to wish you “bon chance” and watch you succeed so we’re offering up some wise advice shared by our friend, Chase LeBlanc, founder of Leadagers™ LLC (www.leadagers.com).
IF&B – Chase, you have been in the industry for quite some time – what advice do you have for someone who is thinking opening an F&B operation?
CL – Do not rush into owning your own place. The more competent and successful you are at multiple jobs within the industry, the easier it will be to obtain money. As you become more bankable, the less “bank” you will personally have to risk. Excellence will always attract interest. Just because you can doesn’t mean you should. You might have the idea, experience, desire, money, and location all lined up, but unless you have an absolute determination to do whatever it takes to make it happen, or an absolute psychosis about working for other people, don’t start your own business!
IF&B – I think I know what it takes and I hate working for other people, so why should I stop and question my decision to go off on my own?
CL – Making good money at it has to be a “pretty darn sure” rather than a “surely hope to” proposition. It is a lot more work than you know, without a lot of down time. You will screw up many lives, including your own, if you do not pull it off.
IF&B – Money (bank loans) for small business is pretty hard to come by these days, what can a start-up owner/operator do to help their cause/case?
CL – Determine a realistic financial game plan—the earlier the better. Know every aspect of costs and controls…fixed costs (unaffected by sales volume changes), variable costs (clearly linked to business volume changes) and prime costs (food, beverage, payroll, payroll taxes, and benefits). Over analyze every aspect and know what your break even point is from the “git go” by having a solid proforma.
IF&B – Can you be more specific?
CL – With any new business plan you might want to create a quick checklist that includes the following touch-points: Before you even think about crossing the new venture starting line, you must obtain legal exclusivity or complete control of your brand. Have you uncovered the part of your idea that will allow you to dominate your competition? If so, place that far forward in your business plan. Can you illustrate a way to limit the downside for potential investors? Have you developed your “Plan B” for taking on economic distress/downturns? Does your plan include wiggle room for unforeseeable missteps? What is the period to profitability or rate of return on investment? Can you show the commitment and brilliance of the main players? How fast can it get big? How big can it get? These are some of the things that any experienced investor (if you can find one) will want to know.
CL – I just thought of something else I’d like to add about raising money. Plan the divorce before the kiss—partners, investors, and relatives will all turn nasty if reality steps in to “jack up” your planned success. Be sure there is a legal agreement that specifically points the way to move others out, or for you to move on, before you take a penny of other people’s money.
IF&B- Okay, so we know what to look for before diving into something new, but what if we’re re-evaluating how we handle our business as the operator of an ongoing F&B operation?
CL – You must focus your business efforts on those things that provide for the best chance to get people talking about you in a good way. The big five differentiators are (1) great product, (2) great value, (3) excellent service, (4) great location, and (5) sensationally brilliant decor. (We might now have to include data mining expertise and social relationship-marketing flair but let’s stay old-school for a minute.) A business can be advanced by doing things other people are doing and simply doing them better, but I think that building on things other people are doing and making them unique to you, through your location, personality or value proposition, offers a better chance to get people buzzing about you.
Secondly, it may be unwritten, but you are promising something. The best “first” move is always to make sure that your current guests are getting their money’s worth. So, the question becomes are the establishment’s actions meeting or exceeding its “brand” promise? If not, that is the first fix. Never attempt to get new guests to try a “we’re working on it” experience. With that said, you might think I’m asking you to bear down until you can produce perfection. Not so. Just be able to back up your mission/values and standards/specs. If you don’t have those items in place, by all means jump on that as well.
IF&B- This has been enlightening, thank you. Is there anything else you’d like to add?
CL- I’d be remiss not to include – get the best lawyer, accountant, and insurance agent you can afford, but only if they are referred to you by a trusted source. And pay your friggin’ taxes!
As the founder of Leadagers Chase LeBlanc offers leadership for managers and ops performance forensics for hospitality, foodservice, bars and restaurants so that you can OUTSMART, OUTPACE, AND OUTSHINE Your Competition! He is also the author of High Impact Hospitality (www.amzn.to/guebkx)